Loss of Family Income

Published on October 17, 2016 / Income Loss

As a result of my injuries sustained in a car crash, my spouse must take time away from his side businesses in order to perform the duties I would usually perform for a different family business. Can I claim the lost income his side businesses suffer?

In the case of Salame v Sutherland (2016 BCSC 1610) the plaintiff suffered a fractured sternum, left rotator cuff tear, soft tissue injuries, and resulting depressive symptoms as a result of a motor vehicle crash. At the time of the crash the plaintiff, her husband and children all contributed to running multiple family businesses including a laundromat, bookkeeping and security camera installation companies. The plaintiff worked primarily for the laundromat, while her husband focussed on the security camera and bookkeeping companies. As a result of her injuries, the plaintiff was unable to work at the laundromat for a period of time following the crash. During this time her husband took over her duties at the laundromat, however, this required him to turn down approximately $2,000 of security camera installation work. The plaintiff then included this lost income, suffered by her husband’s company, in her income loss claim, where typically, a plaintiff can only claim the lost income they themselves have suffered as a result of their injuries. Fortunately for the plaintiff, she was successful in claiming her husband’s lost income as the court found that the multiple family operated businesses all contributed to a “family pot”, which suffered a loss as a result of the plaintiff’s injuries. Below are the court’s comments in regards to the “family pot” and the loss of income it suffered:

[117] Ms. Salame and her husband operate the laundromat as a family business and the income earned goes into a “family pot”. The income earned from Mr. Khattab’s side businesses also goes into the “family pot”.

[121] During the time that Ms. Salame was not able to work at the laundromat, her duties were assumed by Mr. Khattab, by some of Ms. Salame’s children, and for about a 10-month period of time by the part-time employee, Mr. Weir. Mr. Khattab spent 9 to 10 hours a day, seven days a week at the laundromat. The children worked about 15 hours a week. In February 2014, Mr. Weir was hired. He worked about 17 hours a week between February and November 2014, for a total of slightly less than 700 hours. The children were not paid wages for their work but Mr. Weir was paid wages. The cost to the business for Mr. Weir’s work, including wages and CPP and EI contributions, was $7,870.08.

[122] Mr. Khattab turned down requests for security camera installations because that work required him to leave the laundromat and Ms. Salame was not able to cover for him. He estimated that he lost about $2,000 in income in 2015 as a result. He turned down this kind of work in 2013 and 2014 as well, but he did not provide an estimate or any evidence of the amount of income lost as a result.

[128] Similarly, I have no difficulty concluding that Ms. Salame has established a pecuniary loss in an amount equal to the income forgone from the security camera installation business. While she was not personally involved in that business, I am satisfied that it was as much a family business as was the laundromat in that the income from it went into the same family pot. Had an employee been hired to mind the laundromat so that Mr. Khattab could attend to the security camera installation business, the laundromat would have suffered a loss. In Hanson v. Smith, 1990 CanLII 438 (BCSC), a similar situation was held to give rise to a compensable loss of earning capacity. The measure of this aspect of Ms. Salame’s loss is the loss to the security camera installation business. This is difficult to quantify on the evidence before me. I accept Mr. Khattab’s estimate of $2,000 of income forgone in 2015, but there is no evidence of the magnitude of the loss in the earlier years. Ms. Salame’s counsel submits that it is reasonable to infer the loss would be similar each year, but Mr. Khattab did not testify to that effect. Ms. Salame bears the burden of establishing the loss. In the circumstances, she has only established a loss of $2,000 in forgone income from the security camera installation business.

[130] For the forgoing reasons, I assess Ms. Salame’s damages for past loss of earning capacity, prior to any adjustment for contingencies, at $9,870.08. Again, I will adjust for contingencies later in this judgment.

Paul began practicing law in 1995 in a general litigation practice. Of the various areas of litigation, he became most drawn to and passionate about pursuing fair compensation for personal injury victims, which has gradually became his exclusive area of practice. Paul's practice is restricted to acting only for the injured victim, never for ICBC nor for other insurance companies.